<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[X] Preliminary proxy statement
[ ] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
Celex Group, Inc. (File No. 33-67530-C)
- -------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
Guy E. Snyder, Esq.
- -------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
[X] $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total fee paid:
- --------------------------------------------------------------------------------
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the form or schedule and the date of its filing.
(1) Amount previously paid:
- --------------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
- --------------------------------------------------------------------------------
(3) Filing party:
- --------------------------------------------------------------------------------
(4) Date filed:
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<PAGE> 2
CELEX GROUP, INC.
___________________________
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD July 30, 1996
To the Shareholders of Celex Group, Inc.
Notice is hereby given that the annual meeting of shareholders of Celex Group,
Inc., an Illinois corporation (the "Company"), will be held at the Drake
OakBrook Hotel, 2301 York Road, Oak Brook, Illinois 60521, on Tuesday, July 30,
1996 at 10:00 A.M., Central Daylight Savings Time, for the following purposes:
(a) To elect four (4) Class I directors for the terms specified in the
proxy statement or until their successors are elected and qualified;
(b) To approve amendments to the Company's Stock Option Plan;
(c) To consider and act upon a proposal to amend the Company's Articles
of Incorporation to change the Company's name to Successories, Inc.;
(d) To ratify the appointment of Price Waterhouse LLP as independent
accountants for the fiscal year ending February 1, 1997; and
(e) To transact such other business as may properly come before the
meeting.
Shareholders of record as of the close of business on June 14, 1996 will be
entitled to vote at the annual meeting. Shares should be represented as fully
as possible, since a majority is required to constitute a quorum.
Please mark, sign, date and mail the accompanying proxy in the enclosed
self-addressed, postage paid envelope, whether or not you expect to attend the
meeting in person. You may revoke your proxy at the meeting should you be
present and desire to vote your shares in person, and you may revoke your proxy
for any reason at any time prior to the voting thereof, either by written
revocation prior to the meeting or by appearing at the meeting and voting in
person. Your cooperation is respectfully solicited.
By Order of the Board of Directors,
TIMOTHY C. DILLON
Secretary
Lombard, Illinois
June _____, 1996
<PAGE> 3
CELEX GROUP, INC.
919 Springer Drive
Lombard, Illinois 60148
(708) 953-8440
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
To Be Held on July 30, 1996
INTRODUCTION
The enclosed proxy is solicited on behalf of the Board of Directors of Celex
Group, Inc. (the "Company") in connection with the annual meeting of
shareholders to be held on July 30, 1996 at 10:00 A.M., Central Daylight
Savings Time, and any adjournment thereof ("Annual Meeting"), at the Drake
OakBrook Hotel, 2301 York Road, Oak Brook, Illinois, 60521.
The cost of proxy solicitation will be borne by the Company. In addition to
the solicitation of proxies by the use of the mails, certain officers and other
regular employees of the Company may devote part of their time (but will not be
specifically compensated therefor) to solicitation by telegraph, telephone or
in person. Proxies may be revoked at any time prior to voting. Revocation may
be done prior to the meeting by written revocation sent to the Secretary of the
Company, Celex Group, Inc., 919 Springer Drive, Lombard, Illinois 60148; or it
may be done personally upon oral or written request at the Annual Meeting.
This proxy statement was first mailed or delivered to shareholders on or about
June __, 1996.
RECORD DATE; VOTING SECURITIES OUTSTANDING
The close of business on June 14, 1996 is the record date for determining the
holders of common stock, $.01 par value ("Common Stock"), of the Company
entitled to notice of and to vote at the Annual Meeting.
As of May 8, 1996, the Company had outstanding voting securities consisting
of 5,226,304 shares of Common Stock. Each holder of record of outstanding
Common Stock at the close of business on June 14, 1996 will be entitled to vote
at the Annual Meeting. Presence in person or by proxy of holders of a majority
of the outstanding shares of Common Stock will constitute a quorum at the
Annual Meeting. A broker non-vote (where a broker submits a proxy but does not
have authority to vote a customer's shares on one or more matters) is not
considered entitled to vote and is not counted in determining voting results.
If a shareholder, present in person or by proxy, abstains on any matter, that
shareholder's shares are treated as present and entitled to vote. Thus, an
abstention from voting on a matter has the same legal effect as vote "AGAINST"
the matter.
1
<PAGE> 4
SECURITY OWNERSHIP
The following table sets forth, with respect to the Company's Common Stock, all
persons known to be the beneficial owner of more than 5% of the Company's
Common Stock as of May 8, 1996.
<TABLE>
<CAPTION>
NUMBER OF SHARES
AND NATURE OF
BENEFICIAL
BENEFICIAL OWNER OWNERSHIP(1) PERCENT OF CLASS
- ---------------- ------------------- ----------------
<S> <C> <C>
Arnold M. Anderson........ 1,126,637 (2) 19.8%
Mary Margaret Anderson.... 280,290 (3,4) 5.4%
</TABLE>
1 Nature of beneficial ownership is direct unless otherwise indicated by
footnote. Beneficial ownership as shown in the table arises from sole
voting and investment power unless otherwise indicated by footnote.
2 Includes 386,709 shares held by Arnold M. Anderson; includes 456,000
shares subject to immediately exercisable options and warrants; includes
5,290 shares held by Mary Margaret Anderson (his wife); includes 275,000
shares held in trust by Mary Margaret Anderson as trustee, as to which Mr.
Anderson has sole voting and investment power; includes 2,638 shares held
in trust by Mr. Anderson as trustee, as to which Mr. Anderson has sole
voting and investment power; and includes 1,000 shares held in the name of
his son.
3 Includes 5,290 shares held by Mary Margaret Anderson and includes 275,000
shares held in trust by Ms. Anderson as trustee, as to which Arnold M.
Anderson has sole voting and investment power.
4 Ms. Anderson's address is 222 Hawley Street, Geneva, Illinois 60134.
2
<PAGE> 5
The following table sets forth, as of May 8, 1996, with respect to the shares
of Common Stock beneficially owned by: (i) each director and nominee; (ii) the
Chief Executive Officer; (iii) the other most highly compensated executive
officer; and (iv) all directors and executive officers as a group.
<TABLE>
<CAPTION>
NUMBER OF SHARES
AND NATURE OF
BENEFICIAL PERCENT
BENEFICIAL OWNER OWNERSHIP(1) OF CLASS
- ---------------- -------------------- --------
<S> <C> <C>
Arnold M. Anderson......................... 1,126,637 (2) 19.8%
James M. Beltrame.......................... 151,021 (3) 2.8%
Seamas T. Coyle............................ 4,830 (4) *%
Timothy C. Dillon.......................... 18,163 (5) *%
M. Andrew King............................. 564 (6) *%
C. Joseph LaBonte.......................... 50,746 (7) *%
Steven B. Larrick.......................... 32,000 (8) *%
Raymond A. Mackie.......................... 4,750 (9) *%
Michael H. McKee........................... 59,092 (10) 1%
Mervyn C. Phillips, Jr..................... 82,011 (11) 1.5%
Neil Sexton................................ 33,242 (12) *%
Michael Singletary......................... 10,500 (13) *%
Guy E. Snyder.............................. 2,200 (14) *%
Jill Werner................................ 3,000 (15) *%
All of the directors and executive officers
as a group (14 persons)................... 1,578,756 (16) 27%
</TABLE>
* Percentage represents less than 1% of the total shares of Common Stock
outstanding as of May 8, 1996.
1 Nature of beneficial ownership is direct unless otherwise indicated by
footnote. Beneficial ownership as shown in the table arises from sole
voting and investment power unless otherwise indicated by footnote.
2 See note 2 on page 2 hereof regarding nature of stock ownership set forth
above.
3 Includes 140,000 shares subject to immediately exercisable options and
warrants; excludes 1,000 shares held by ______ (his mother) as to which
Mr. Beltrame shares joint investment control but which he disclaims
beneficial ownership.
4 Includes 815 shares held by ______________, custodian for Seamas T. Coyle
Individual Retirement Account; includes 315 shares held by ___, Custodian
for ___________ Coyle (his wife) Individual Retirement Account; also
includes 3,700 shares subject to immediately exercisable options and
warrants.
5 Includes 11,413 shares held by Timothy C. Dillon and Julie L. Dillon (his
wife); also includes 6,750 shares subject to immediately exercisable
options.
6 Includes 564 shares held by M. Andrew King and Theresa King (his wife)
as joint tenants.
7 Includes 6,500 shares subject to immediately exercisable options and
warrants.
8 Includes 13,000 shares held by Steven B. Larrick and __________ Larrick
(his wife) as joint tenants; includes 6,000 shares in aggregate held in
trust for the benefit of each of Cathy, Natalie, Elizabeth and
3
<PAGE> 6
James Larrick (his children); also includes 4,000 shares subject to
immediately exercisable options and warrants.
9 Includes 2,000 shares subject to immediately exercisable options.
10 Includes 31,462 shares held by Michael H. McKee; includes 9,300 shares
held by Michael McKee and Cassandra McKee (his wife) as joint tenants;
includes 330 shares held by Cassandra McKee; and includes 18,000 shares
subject to immediately exercisable options.
11 Includes 22,500 shares held by NFSC-FMT co., custodian for Mervyn C.
Phillips, Jr. Individual Retirement Account; includes 12,000 shares held
by Five M's Ltd. Money Purchase Pension Plan, of which Mr. Phillips is
trustee; includes 35,011 shares held by Mr. Phillips as trustee of Mervyn
C. Phillips Recovable Trust; includes 2,500 shares subject to immediately
exercisable options; and excludes 5,000 shares held by Mr. Phillips as
trustee under the will of M.C. Phillips,III for the benefit of a family
trust to which Mr. Phillips has voting power but which he disclaims
beneficial ownership.
12 Includes 15,242 shares held by Neil Sexton and 18,000 shares subject to
immediately exercisable options.
13 Represents 10,500 shares subject to immediately exercisable options and
warrants.
14 Includes 300 shares held by Guy E. Snyder and Linda G. Snyder (his wife)
as joint tenants; includes 300 shares held by Linda G. Snyder; and
includes 800 shares subject to immediately exercisable warrants.
15 Includes 750 shares subject to immediately exercisable options; and
includes 2,250 shares subject to immediately exercisable options held by
Kenneth Werner (her husband).
16 Includes 670,950 shares subject to options and warrants exercisable
within sixty days; includes 63,087 shares as to which voting and/or
investment powers are shared.
4
<PAGE> 7
ITEM 1
ELECTION OF DIRECTORS
It is intended that the shares represented by the enclosed proxy will be voted,
unless votes are withheld in accordance with the instructions contained in the
proxy, for the election of the four (4) nominees for Class I Director named
below. In the event that any nominee for Director should become unavailable,
which is not anticipated, the Board of Directors in its discretion may
designate substitute nominees, in which event such shares will be voted for
such substitute nominees. Provided a quorum is present, the affirmative vote
by the holders of a majority of the shares of Common Stock represented at the
Annual Meeting in person or by proxy is required for the election of each
nominee.
The identity of each such Director and his term is indicated below.
CLASS I
(TERM EXPIRING IN 1999)
Seamas T. Coyle
Timothy C. Dillon
Steven B. Larrick
Guy E. Snyder
Directors hold office until the Annual Meeting in the fiscal year in which
their terms expire and until their respective successors have been elected and
qualified.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR EACH OF THE
NOMINEES NAMED BELOW.
INFORMATION CONCERNING NOMINEES:
<TABLE>
<CAPTION>
DIRECTOR
NAME AGE SINCE PRINCIPAL OCCUPATION FOR LAST FIVE YEARS
- ---- --- ----- ----------------------------------------
<S> <C> <C> <C>
Seamas T. Coyle(1 and 2) 45 1995 Partner in the accounting firm of
Coyle, Fanning & Company and its
predecessors since 1980; prior thereto,
a Certified Public Accountant since
1974. Coyle, Fanning & Company
performs services for the Company.
Timothy C. Dillon 33 1995 Vice President of the Company since
April 1993; prior thereto, President of
First American Franchise Corporation
(the franchising subsidiary of Beauty
Express, Inc.); prior thereto attorney
for Francorp, Inc. (a franchise
development consulting firm) since
1989.
Guy E. Snyder(1 and 2) 42 1995 Partner in the law firm of Vedder,
Price, Kaufman & Kammholz since March,
1996, a law firm that serves as counsel
to the Company; prior thereto a partner
in the law firm of Keck, Mahin & Cate
which served as counsel to the Company.
Steven B. Larrick(3) 49 N/A Chairman and Chief Executive Officer of
Chernin's Shoes, Inc. since 1993; prior
thereto served in various management
level positions with Chernin's Shoes,
Inc. since 1973.
</TABLE>
- ---------------
1 Member of the Executive Committee.
2 Member of the Audit Committee.
3 Member of the Compensation and Stock Option Committee.
5
<PAGE> 8
The Board of Directors held four meetings during the fiscal year ended February
3, 1996. All Directors attended at least 75% of the aggregate of the total
number of meetings of the Board of Directors and the total number of meetings
held by each committee of the Board on which such Directors served. In
addition to the Executive Committee, the Board of Directors of the Company has
standing Audit, Compensation and Stock Option Committees.
The Audit Committee held four meetings during the fiscal year ended February 3,
1996. This Committee is responsible for reviewing with the Company's financial
management and its independent auditors, the proposed audit program for each
fiscal year, the results of the audits and the adequacy of the Company's
systems of internal accounting control. The committee recommends to the Board
of Directors the appointment of the independent auditors for each fiscal year.
Directors Coyle, Phillips and Snyder are members of this Committee.
COMPENSATION AND OTHER TRANSACTIONS WITH MANAGEMENTS
SUMMARY COMPENSATION TABLE
The Summary Compensation Table below includes, for the fiscal year ended
February 3, 1996 and for each of the fiscal years ended April 30, 1995, 1994,
and 1993, individual compensation for services to the Company and its
subsidiaries of those persons who were, at February 3, 1996: (i) the Chief
Executive Officer; and (ii) the other most highly compensated executive
officers of the Company (collectively, the "Named Officers").
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
------------------- ------
OTHER ANNUAL SECURITIES ALL OTHER
SALARY BONUS COMPENSATION UNDERLYING COMPENSATION
NAME AND PRINCIPAL POSITIONS YEAR ($) ($) ($) OPTIONS (#)
- ---------------------------- ---- ------ ----- ------------ ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
Arnold M. Anderson.................. 1996(1) 131,250 0 0 0 0
Chairman of the Board and 1995 175,000 0 0 0 0
Chief Executive Officer 1994 164,654 0 8,599(3) 0 0
1993 139,231 59,231 8,705(3) 300,000(4) 0
James M. Beltrame................... 1996(1) 110,885 0 0 70,000(6) 0
President, Chief Operating Officer, 1995(2) 12,981 0 0 0
Chief Financial Officer and Director
Michael H. McKee.................... 1996(1) 93,750 0 0 0 0
Senior Vice President, 1995(1) 100,000 0 0 0 0
Creative Director and Director 1994 98,675 0 3,600(3) 0 0
1993 81,694 10,155 3,900(3) 30,000(5) 0
</TABLE>
1 Represents compensation for the nine month fiscal year beginning May 1,
1995 and ending on February 3, 1996.
2 For the period since Mr. Beltrame became employed by the Company on March
14, 1995.
3 Represents a cash car allowance.
4 Represents the aggregate number of options granted pursuant to the terms
of an employment agreement and the Company's Option Plan. Such options
become fully vested and exercisable immediately upon issuance.
5 Represents options granted pursuant to the Company's Stock Option Plan
effective April 8, 1993. Such options vest and become exercisable in five
equal annual installments commencing April 8, 1994.
6
<PAGE> 9
6 Represents options granted pursuant to the Company's Stock Option Plan
effective April 8, 1993. Such options vest and become exercisable in five
equal annual installments commencing on the following dates: 30,000 on
June 8, 1995, 20,000 on February 3, 1996 and 20,000 on February 1, 1997.
In addition, the exercise of the option to purchase 20,000 shares on
February 3, 1996 and the option to purchase 20,000 shares on February 1,
1997 are both subject to the attainment of certain revenue and
profitability goals agreed to by Mr. Beltrame and the Board of Directors.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE VALUE
AT ASSUMED RATES OF STOCK
NUMBER OF PERCENT OF TOTAL PRICE APPRECIATION FOR
SECURITIES OPTIONS GRANTED EXERCISE OR OPTION TERM
UNDERLYING TO EMPLOYEES IN BASE PRICE EXPIRATION -----------
OPTIONS FISCAL YEAR (%) ($/SH.) DATE 5% 10%
------- --------------- ------- ---- ------- --------
<S> <C> <C> <C> <C> <C> <C>
Arnold M. Anderson 0 0 -- -- -- --
James. M. Beltrame 70,000 100 6.875 6/8/05 $24,080 $48,160
Michael H. McKee 0 0 -- -- --
</TABLE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF VALUE OF
SECURITIES UNEXERCISED
UNDERLYING IN THE MONEY
UNEXERCISED OPTIONS AT
SHARES OPTIONS AT FY-END FY-END ($)
ACQUIRED ON VALUE (#) EXERCISABLE/ EXERCISABLE/
NAME EXERCISE (#) REALIZED ($) UNEXERCISABLE UNEXERCISABLE
- ---- ------------ ------------ ------------- -------------
<S> <C> <C> <C> <C>
Arnold M. Anderson........... ------------- ----------1 ----------/-------- ---------/-------
James M. Beltrame............ ------------- ---------- ----------/-------- ---------/------- 2
Michael H. McKee............. 0 0 ----------/-------- ---------/------- 3
</TABLE>
1 Based upon the sale price of $_____ per share less the exercise price of
$____ per share.
2 Based on the closing sale price as reported by the Nasdaq National Market
for ____________, 1996, $____, less the exercise price of $____ as to
_______ shares and $____ as to _______ shares.
3 Based upon the closing sale price as reported by the Nasdaq National
Market for ____________, 1996, $____, less the exercise price of $____ per
share.
7
<PAGE> 10
BOARD COMPENSATION AND STOCK OPTION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Company's compensation philosophy is comprised of several elements designed
to attract and retain key personnel, reward outstanding performance and link
executive pay to long-term Company performance. These elements consist of a
base salary, annual bonus compensation relating pay to performance, and
long-term incentive awards designed to align executive interests with
shareholder interests.
BASE SALARY
The base salary of Mr. Anderson was established pursuant to an employment
agreement dated February 1993 (the "Employment Agreement") whereby Mr. Anderson
receives a minimum salary of $175,000 per year annually for a period of three
years.
The base salaries of the Company's other executive officers are determined by
Messrs. Anderson and Beltrame with the approval of the Compensation and Stock
Option Committee. Individual salaries are determined based on historical
salary levels within the Company or the salary level of the officer at the time
he commenced employment with the Company, and salary levels generally
correspond to the level of responsibility of each executive. Increases are
generally determined with regard to available earnings and individual
performance.
BONUS COMPENSATION
Annual Bonuses for executive officers of the Company, excluding Messrs.
Anderson and Beltrame, are determined by the Compensation and Stock Option
Committee based on the recommendation of Messrs. Anderson and Beltrame and are
awarded pursuant to the Company's bonus program (the "Bonus Program"). Based
on the recommendations of Messrs. Anderson and Beltrame, the Compensation and
Stock Option Committee designates participants in the Bonus Program at the
beginning of each fiscal year and may, in its discretion, amend its list of
participants in the Bonus Program during the year. The aggregate amount to be
distributed (the "Distribution Amount") pursuant to the Bonus Program is
determined pursuant to a formula based upon a percentage of specified profit
and sales levels (collectively, the "Target Level"). The Target Level is
recommended by Messrs. Anderson and Beltrame and is approved by the
Compensation and Stock Option Committee. No bonuses are required to be paid
under the Bonus Program unless the Target Level is attained. Each of the Named
Officers is eligible to receive a bonus pursuant to the Bonus Plan. If the
Target Level is achieved, the Distribution Amount is distributed among each of
the participants in the Bonus Program in accordance with each participant's
individual bonus plan. Messrs. Anderson and Beltrame reserve the right to
recommend to the Compensation and Stock Option Committee that any individual
award under the Bonus Program be increased or decreased in an amount equal to
one third (1/3) of any bonus earned based upon individual performance factors
or special circumstances. Bonuses pursuant to the Bonus Program are paid to
the participants generally within thirty (30) days of the filing of the
Company's Annual Report or Form 10-K with the Securities and Exchange
Commission. Based on the parameters of the Bonus Program and the required
Target Levels, no bonuses were
8
<PAGE> 11
earned for the fiscal year ended February 3, 1996. The Company intends,
however, to award certain discretionary bonuses to the Named Officers. The
amount of such awards has not yet been determined.
LONG-TERM INCENTIVE
The Company's Stock Option Plan (the "Option Plan") authorizes the Compensation
and Stock Option Committee to grant the employees of the Company and its
subsidiaries incentive or non-qualified stock options. The Compensation and
Stock Option Committee determines the prices and terms at which such options
may be granted. The purpose of the Option Plan is to encourage stock ownership
by the persons instrumental to the success of the Company, in order to give
them a greater personal interest in the Company's affairs.
On June 8, 1995, the Company granted Mr. Beltrame options to purchase
an aggregate of 70,000 shares of the Company's common stock, par value $.01 per
share (the "Common Stock") at an exercise price of $6.875 per share pursuant to
the Option Plan. Pursuant to the Non-Qualified Stock Option Agreements
executed by Mr. Beltrame, the exercise of 40,000 of such options are subject to
the attainment of certain revenue and profitability goals agreed to by Mr.
Beltrame and the Board of Directors. Such options expire on June 8, 2005. No
other options were granted to executive officers of the Company during the
fiscal year ended February 3, 1996.
In addition, on February 6, 1996 Messrs. Anderson and Beltrame were
granted options to purchase 20,000 shares each at an exercise price of $7.625
per share pursuant to Common Stock Option Agreements dated February 6, 1996
separate and aside from the Company's Option Plan. Such options vested on the
date of the grant and expire on February 6, 2006.
Further, as discussed in Item 2 herein, on May 21, 1996, the Board of
Directors approved further amendments to the Option Plan, subject to
shareholder approval. The amendments to the Option Plan would (i) increase the
number of shares of Common Stock that may be issued thereunder from 950,000 to
1,450,000; (ii) provide that non-qualified options to purchase four thousand
(4000) shares of Common Stock be granted automatically to each person serving
as a non-employee director immediately following each Annual Meeting of
Shareholders, beginning with the upcoming Annual Meeting. On February 6, 1996,
discretionary options to purchase 80,000 shares at an exercise price of
$7.625 per share were granted to each of Messrs. Anderson and Beltrame vesting
on the date of the grant and expiring on February 6, 2006, subject to
shareholder approval of the proposed amendments. Further, in the case of the
non-employee directors, the annual grant of nonqualified options will replace
the cash meeting fees paid by the Company to such directors, thereby fully
tying such directors' compensation to the performance of the Company's Common
Stock. These amendments are subject to approval by the shareholders of the
Company at the Annual Meeting. In the event that the amendments are not
approved by the shareholders at the Annual Meeting, they will terminate
retroactively and all options granted thereunder will be null and void as more
fully described in Item 2 herein.
Steven B. Larrick
Mervyn C. Phillips, Jr.
Michael Singletary
9
<PAGE> 12
PERFORMANCE GRAPH
The following graph sets forth a comparison of cumulative total returns for:
(i) the Company's Common Stock (which is traded on Nasdaq National Market);
(ii) the CRSP Total Return Index for the Nasdaq Stock Market; and (iii) the
CRSP Total Return Index for Nasdaq Retail Trade Stocks.
On December 1, 1993, the Company's Common Stock began trading on the Nasdaq
National Market under the symbol CLXG. All returns were calculated assuming
dividend reinvestment.
160
150 U
140
U Celex Group, Inc.
130
* NASDAQ Market
D 120
0 + NASDAQ Retail
L 110 *
L
*
A 100 U +
R
S 90 +
80
70
60 U
50
12/01/93 04/29/94 04/28/95 02/03/96
Assumes $100 invested on December 1, 1993 in Celex Group, Inc. common stock,
the CRSP Total Return Index for Nasdaq Stock Market and the CRSP Total Return
Index for Nasdaq Retail Trade Stocks.
10
<PAGE> 13
COMPENSATION AND STOCK OPTION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
On April 6, 1993, the Company established a Compensation Committee of the Board
of Directors for purposes of making certain executive compensation decisions.
On May 21, 1996, the Compensation and Stock Option Committee was combined with
the Compensation Committee to form the Compensation and Stock Option Committee.
Messrs. Larrick, Phillips and Singletary are members of the Compensation and
Stock Option Committee. At the request of the Compensation and Stock Option
Committee, Messrs. Anderson and Beltrame have and will confer with the
Committee to make recommendations for the salaries and bonuses of the executive
officers.
DIRECTOR COMPENSATION
Directors who are also full-time officers of the Company are not paid for their
services as directors or for attendance at meetings. In the past, all
non-employee directors were paid $1,000 plus travel expenses for attending each
Board meeting. Beginning with the 1996 Annual Meeting of Shareholders, each
non-employee director will receive an annual grant to acquire four thousand
(4000) shares of Company common stock at the closing bid price on the Nasdaq
Market pursuant to the Company's Option Plan in lieu of cash compensation for
attending each Board meeting. Such options vest immediately upon grant. In
addition, non-employee directors receive $500 plus travel expenses for
attending each Committee meeting.
EMPLOYMENT AGREEMENT
In February 1993, the Company entered into an employment agreement with Arnold
M. Anderson, which provides that he will receive a minimum salary of $175,000
per year annually for three years. In addition, the agreement requires a bonus
to be paid to Mr. Anderson commencing in fiscal year 1994 based on a percentage
of certain minimum levels of pre-tax profits, with the bonus not to exceed
$200,000. Pursuant to this formula, the full bonus was not earned for the
fiscal year ended February 3, 1996; however, the Company intends to award a
partial bonus for the fiscal year ended 1996. The amount of said bonus has not
yet been determined.
On April 8, 1993, the Company issued an option to Mr. Anderson to purchase
300,000 shares of Common Stock at a price of $5.33 per share pursuant to the
terms of the employment agreement and the Company's Option Plan. Such option
extends for a period of ten years.
CERTAIN TRANSACTIONS
On February 7, 1996, the Company entered into a Second Amendment to Credit
Agreement with NBD Bank extending the term of the Company's line of credit to
May 1, 1996 and modifying certain other terms and conditions of the loan
agreement. Pursuant to this agreement, Messrs. Anderson and Beltrame executed
personal guarantees in the amount of $100,000 and $900,000, respectively.
11
<PAGE> 14
All transactions between the Company and its officers, directors, and principal
shareholders are required to be approved by a majority of the independent and
disinterested non-employee directors and must be on terms no less favorable to
the Company than could be obtained from unaffiliated third parties.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT
Under the securities laws of the United States, the Company's directors, its
executive officers, and any persons holding more than 10% of the Company's
Common Stock are required to report their initial ownership of the Company's
Common Stock and any subsequent changes in that ownership to the Securities and
Exchange Commission. Specific due dates for these reports have been
established and the Company is required to disclose in this proxy statement any
failure to file by the applicable due dates during the 1996 fiscal year.
All of these filing requirements were satisfied, except that Arnold M.
Anderson, Officer and Director of the Company, filed one late report covering
one transaction; James M. Beltrame, Officer and Director of the Company filed
one late report covering one transaction; Seamas T. Coyle, Director of the
Company filed one late report covering his initial ownership and one late
report covering one transaction; C. Joseph LaBonte, Director of the Company,
filed one late report covering one transaction; Raymond A. Mackie, Officer of
the Company, filed one late report covering his initial ownership; Scott
Morrison, a former holder of more than ten percent of the Company's Common
Stock, filed one late report covering three transactions; Mervyn C. Phillips,
Jr., Director of the Company, filed one late report covering one transaction;
Sam Raich, Jr., a former Director of the Company, filed two late reports
covering nine transactions; Michael Singletary, Director of the Company, filed
one late report covering one transaction; and Guy E. Snyder, Director of the
Company, filed one late report covering one transaction.
ITEM 2
PROPOSED AMENDMENTS TO THE CELEX GROUP, INC. STOCK OPTION PLAN
There will be presented at the Annual Meeting a proposal to amend the Company's
Stock Option Plan (the ``Option Plan") which was initially adopted by the
Company's board of directors effective April 8, 1993, approved by the Company's
shareholders on September 29, 1993. On December 14, 1994 and July 26, 1995,
the Board of Directors of the Company approved amendments to the Option Plan
subject to shareholder approval at the October 12, 1995 shareholder meeting,
which approval was obtained. As of May 22, 1996, 100% of the shares of Common
Stock authorized for issuance under the Option Plan have either been reserved
for issuance thereunder or have been issued to participants pursuant to the
exercise of options.
On May 21, 1996, the Board of Directors approved further amendments to
the Plan, subject to shareholder approval. The amendments to the Option Plan
would (i) increase the number of shares of Common Stock that may be issued
thereunder from 950,000 to 1,450,000; (ii) provide that non-qualified options
to purchase four thousand (4000) shares of Common Stock be granted
automatically to each person serving as a non-employee director immediately
following each Annual Meeting of Shareholders, beginning with the upcoming
Annual Meeting. The purpose of the proposed amendments to the Plan is to
enable the Company to continue to provide incentive to its key employees and
non-employee directors through stock ownership. As discussed in the Board
Compensation and Stock Option Committee Report on Executive Compensation, on
February 6, 1996, discretionary options with respect to 80,000 shares were
granted to each of Messrs. Anderson and Beltrame, subject to shareholder
approval of the proposed amendments. Further, in the case of the non-employee
directors, the annual grant of nonqualified options will replace the cash
meeting fees paid by the Company to such directors, thereby fully tying such
directors' compensation to the performance of the Company's Common Stock. These
amendments are subject to approval by the shareholders of the Company at the
Annual Meeting. In the event that the amendments are not approved by the
shareholders at the Annual Meeting, they will terminate retroactively and all
options granted thereunder will be null and void.
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<PAGE> 15
Assuming a quorum is present, an affirmative vote by the holders of a majority
of the outstanding Common Stock present in person or represented by proxy at
the Annual Meeting and entitled to vote thereon is required to amend the Option
Plan.
The following is a summary of the Option Plan as amended to reflect the matters
to be considered at the Annual Meeting. This summary, however, does not
purport to be a complete description of the Option Plan. A copy of the amended
Option Plan giving effect to the proposed amendments to be acted upon at the
Annual Meeting is attached to this Proxy Statement as Exhibit A and is
incorporated herein by reference.
GENERAL
The purpose of the Option Plan is to provide a means by which key employees and
non-employee directors of the Company and its subsidiaries can acquire and
maintain stock ownership, thereby strengthening their commitment to the success
of the Company and its subsidiaries and their desire to remain employed by the
Company and its subsidiaries. The Option Plan is also intended to attract and
retain non-employee directors and key employees and to provide such directors
and key employees with additional incentive and reward opportunities designed
to encourage them to enhance the profitable growth of the Company and its
subsidiaries.
The Option Plan provides for the granting of awards of incentive stock options
("ISOs") within the meaning of Section 422 of the Internal Revenue Code of
1986, as amended (the "Code"), and nonqualified stock options ("NSOs").
(Awards of ISOs and NSOs are sometimes hereinafter collectively referred to as
"Options"). The Option Plan provides for a one-time automatic grant of a
nonqualified stock option to each non-employee director (the "Automatic Grant")
and it is proposed that the Option Plan be amended to provide for annual
automatic grants of nonqualified stock options to such directors (the "Annual
Grant"). The aggregate number of shares that may be granted under the Option
Plan as proposed to be amended is 1,450,000. As of May 22, 1996, the closing
sale price of the Common Stock was $8.00 per share as reported by the
Nasdaq National Market.
THE COMMITTEE
Other than the Automatic Grant provisions, the Option Plan is administered by a
committee (the "Committee") of two or more non-employee directors of the
Company who have not, during the one-year period prior to service on the
Committee, or at any time during such service, been eligible to receive any
discretionary awards pursuant to the Option Plan or any other stock-based plan
of the Company.
Subject to the terms of the Option Plan and except for Automatic and Annual
Grants, the Committee has the discretion to grant Options, to determine the
individual terms of any Option, to amend or cancel any Options (with the
consent of the participant), to interpret the Option Plan and determine all
matters relating to the administration of the Option Plan and the granting of
Options.
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<PAGE> 16
The Automatic Grant is administered by the Board of Directors solely in
accordance with the provisions of Section 6.4 of the Option Plan. The Board
shall have no authority, discretion or power to select the persons who will
receive Automatic and Annual Grants, to determine the number of shares to be
covered by each such option, to set the exercise price, to determine the timing
or circumstances pursuant to which each such option will be granted or the
period within which each such option may be exercised, or to alter any other
terms or conditions specified by Section 6.4 relating to Automatic and Annual
Grants.
ELIGIBILITY
Discretionary options may be granted to any employee of the Company or any of
its subsidiaries. As of February 3, 1996, approximately 302 employees were
eligible to participate in the Option Plan. Non-employee directors are
eligible to receive Automatic and Annual Grants.
INCENTIVE STOCK OPTIONS
The Option Plan permits the Committee to grant ISOs to employees of the Company
or any subsidiary of the Company and to determine the terms and conditions of
each grant including, without limitation, the number of shares subject to each
ISO and the Option exercise period. The ISO exercise price may not be less
than the fair market value of the Common Stock on the date of grant and the
exercise period may not exceed 10 years; provided, however, if the participant
is a holder of more than 10% of the Company's outstanding voting securities,
the exercise price may not be less than 110% of such fair market value on the
date of grant and the exercise period may not exceed five years.
NON-QUALIFIED STOCK OPTIONS
Non-employee directors receive an Automatic Grant of a one-time
non-qualified stock option to purchase five thousand (5000) shares of Stock
upon first being appointed or elected to the Board. Subject to shareholder
approval of the proposed amendments, on each date of the Annual Meeting of
Shareholders, commencing with the upcoming 1996 Annual Meeting of Shareholders,
each non-employee director of the Company whose term of office will continue
after such Annual Meeting of Shareholders shall automatically receive an Annual
Grant of an option to purchase four thousand shares (4000) of Common Stock as
of such date. These Options have an exercise price of one hundred percent
(100%) of the last bid price of the Stock as of the date of grant or the first
business day preceding such date, if no bid price was then reported. If the
directorship of a non-employee director is terminated for cause, any
unexercised portion of his Option terminates at that time. If his termination
is caused by his death, any unexercised portion of his Option automatically
vests and may be exercised, in whole or in part, at any time within one year
after his death. If his termination is caused by a disability, then any
unexercised Option may be exercised, in whole or in part, at any time within
one year after such termination; and if such Grantee should die within such
one-year period, the Option may be exercised within 180 days of such death, if
such date is longer than one year from the date of termination of directorship.
If his termination is caused by any reason other than cause, death or
disability, any unexercised
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<PAGE> 17
Option, to the extent exercisable at the date of such termination, may be
exercised, in whole or in part, at any time within three months after such
termination: and if such Grantee should die within such three-month period, the
Option may be exercised within one year of the date of termination of
directorship. Notwithstanding the foregoing, in no event may an Option be
exercisable beyond the original 10-year term of the Option.
Discretionary Grants. The Option Plan also permits the Committee to grant NSOs
to any employee of the Company and its subsidiaries. The Committee recommends
the grant of NSOs to employees and determines the terms and conditions of each
grant, including the number of shares subject to each NSO, the Option exercise
period and the Option exercise price.
PAYMENT OF EXERCISE PRICE
A participant may, at his election, pay the Option exercise price in cash or
shares of Common Stock, including shares of Common Stock which the participant
received upon the exercise of one or more Options or any combination of both.
Except in the case of an Automatic Grant and an Annual Grant, the Committee may
also permit the Option exercise price to be paid by the participant's delivery
of an election directing the Company to withhold shares of Common Stock from
the Common Stock otherwise due upon the exercise of an Option.
VESTING; TERMINATION OF EMPLOYMENT; CHANGE IN CONTROL
Options granted pursuant to the Automatic Grant vest in annual increments of
50% commencing on the first anniversary of the grant date and those granted
pursuant to the Annual Grant will vest fully on the first anniversary of the
date of grant. Unless the Committee determines otherwise, generally,
discretionary Options vest in annual increments of 20% commencing on the first
anniversary of the grant date. A participant may not exercise an Option until
the Option has vested.
If a participant's employment is terminated for cause, any unexercised Option
held by the participant terminates upon the termination of employment. If a
participant's employment is terminated by reason of death, any unexercised
Options held by him or her automatically vests and may be exercised, in whole
or in part, at any time within one year after death. If a participant's
employment is terminated on account of disability, any Options held by him or
her may be exercised within one year after termination of employment to the
extent exercisable at the date of such termination, or to such other extent as
determined by the Committee. If a participant's employment is terminated for
any reason other than for cause, death or disability, any unexercised Options
held by him or her may be exercised within three months (or such other period
not to exceed one year as determined by the Committee) after such termination
of employment to the extent exercisable at the date of such termination, or to
such other extent as determined by the Committee. Notwithstanding the
foregoing, in no event may an Option be exercisable beyond the original term of
the Option.
After a Change in Control of the Company, all Options granted under the Plan
shall immediately be fully exercisable for a period of six months following
such Change in Control, after which time no further Options may be exercised
under the Plan.
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<PAGE> 18
NON-TRANSFERABILITY
Options are not transferable other than by will or the laws of descent and
distribution. During a participant's lifetime, Options held by him or her may
be exercised only by the participant.
AGREEMENT TO SERVE
Each Participant who is granted an Option agrees to remain associated with or
in the employ of the Company or any of its subsidiaries for at least one year
after the date of an Option grant. No obligation of the Company or any of its
subsidiaries as to the length of any participant's association or employment
shall be implied by the terms of the Option Plan, any grant of an Option or any
Option agreement The Company and its subsidiaries specifically reserve any
right that existed before the effective date of any Option to terminate the
employment or association of any participant.
WITHHOLDING TAX
With respect to any payments made to a participant other than to a non-employee
director pursuant to an Automatic or Annual Grant, the Company has the right to
withhold in cash or shares of Common Stock any taxes required by law to be
withheld because of such payments.
AMENDMENT; TERMINATION OF PLAN
The Board of Directors of the Company may from time to time in its discretion
amend or modify the Option Plan without the approval of the shareholders of the
Company, unless such shareholder approval may be required (a) to permit
transactions in stock pursuant to the Option Plan to be exempt from liability
under Section 16(b) of the Securities Exchange Act, or (b) under the listing
requirements of any securities exchange on which any of the Company's equity
securities are listed. In addition, the Board may not, without shareholder
approval, change the aggregate number of shares of stock which may be sold
pursuant to Options granted or change the class of employees eligible to
participate in the Option Plan or adopt any amendment affecting the price at
which Options may be granted under the Option Plan. No change will be
permitted to an Option previously granted which will impair the rights of a
participant without the participant's consent. Notwithstanding the foregoing,
the Board cannot amend the provisions relating to the Automatic or Annual Grant
more than once every six months, other than to comport with changes in the
Internal Revenue Code, the Employee Retirement Income Security Act, or the
rules thereunder.
The Option Plan shall terminate on the tenth anniversary of its effective date
or such earlier time as the Board may determine. Any termination, whether in
whole or in part, shall not affect any Option or any Option agreement then
outstanding under the Option Plan.
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<PAGE> 19
AWARDS
Aside from the Automatic Grant and the Annual Grant of non-qualified stock
options to non-employee directors, the grant of Options are within the
discretion of the Committee.
FEDERAL INCOME TAX CONSEQUENCES
The following discussion of the Federal income tax consequences of the Plan is
only a summary of the general rules applicable to Options granted thereunder.
TAX TREATMENT OF ISOS
Generally, the recipient of ISOs does not realize any taxable income either at
the time of grant or exercise, and the Company (or subsidiary that employs the
participant) is not entitled to a deduction either at the time of grant or at
the time of exercise of ISOs, provided that the participant was an employee of
the Company or of a subsidiary of the Company at all times during the period
beginning on the date of grant and ending three months prior to the date of
exercise and does not sell the shares within two years from the date of grant
and one year from the date the shares are issued to the participant upon
exercise. At the time of ultimate sale following the applicable holding
periods, the participant will realize income taxable at capital gain rates on
the excess of the sale price over the ISO exercise price. If a participant
sells such shares prior to the expiration of the applicable holding periods,
the participant will realize ordinary income at that time in an amount equal to
the lesser of (a) the excess of the fair market value of the shares on the date
of exercise over the ISO exercise price, or (b) the gain realized on the sale
(if the sale is for a loss), and the Company will be entitled to a deduction
equal to the amount of such ordinary income.
An amount with respect to an ISO may be included in a participant's alternative
minimum taxable income at the time of exercise for purposes of determining
whether the alternative minimum tax for non-corporate taxpayers will be imposed
on the participant for a given year.
TAX TREATMENT OF NSOS
Generally, the recipient of NSOs does not realize any taxable income at the
time of grant and the Company is not then entitled to a deduction. Upon
exercise of an NSO, the participant will recognize income at ordinary income
tax rates. The amount of income then recognized by a participant will be the
excess of the fair market value of the shares purchased upon exercise over the
exercise price paid for the shares. The Company will generally be entitled to
take a deduction equal to this amount for the year which ends with or includes
the end of the year in which the related amount is included in income by the
participant. In order for the Company to be able to take a deduction for this
amount, however, the amount will have to be considered "reasonable
compensation" and applicable withholding requirements will have to be met.
A participant's basis in shares acquired upon the exercise of an Option will be
the exercise price of the Option, plus any amount includable in the
participant's gross income upon the exercise
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<PAGE> 20
of the Option. The gain or loss realized by the participant upon a
subsequent sale or exchange of the Shares will be a capital gain or loss.
GRANTS UNDER THE PROPOSED PLAN
The following table sets forth the discretionary non-qualified Options granted
to the named executive officers on February 6, 1996, subject to shareholder
approval of the proposed amendments and the Annual Grants that would be made to
the non-employee directors following the Annual Meeting if the proposed
amendments are approved by the shareholders.
<TABLE>
<CAPTION>
NAME AND POSITION NUMBER OF OPTIONS
------------------------------------- -----------------
Discretionary Option
-------------------------------------
<S> <C>
Arnold M. Anderson 80,000
James M. Beltrame 80,000
All executive officers
as a group (4 persons) 160,000
All employees, including all officers
who are not executive officers 160,000
as a group (302 persons)
Seamas T. Coyle 4,000
C. Joseph LaBonte 4,000
Steven B. Larrick 4,000
Mervyn C. Phillips, Jr. 4,000
Michael Singletary 4,000
Guy E. Snyder 4,000
Annual Grants
--------------------------
All Non-Employee Directors
as a group (6 persons) 24,000
</TABLE>
All discretionary options were granted at an exercise price of $7.26, the
closing bid price reported on the Nasdaq National Market for a share of Common
Stock on the date of the grant. The options vest on the date of grant and
terminate on the tenth anniversary of that date.
All Annual Grants will be granted at an exercise price equal to the closing bid
price on the date of the Annual Meeting. The Options will vest immediately on
the Annual Meeting date and will expire on the tenth anniversary of that date,
subject to earlier vesting or termination in accordance with the Plan.
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<PAGE> 21
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR THE APPROVAL
OF THE AMENDMENTS TO THE COMPANY'S STOCK OPTION PLAN.
ITEM 3
PROPOSAL TO AMEND THE COMPANY'S ARTICLES OF INCORPORATION TO CHANGE THE
CORPORATE NAME
The Company's Board has adopted, and is recommending to the stockholders for
their approval at the Annual Meeting, a resolution to amend Article One of the
Company's Articles of Incorporation to change the corporate name. The
applicable text of the Board's resolution is as follows:
"RESOLVED, that Article One of the Company's Articles of Incorporation be
amended to read in its entirety as follows:
"ONE: The name of the corporation is: SUCCESSORIES, INC."
In the judgment of the Board of Directors, the change of corporate name is
desirable in view of the fact that Successories is the servicemark under which
the Company markets its products via catalog and retail sales.
If the proposed name change is adopted, it is the intent of the Company to use
the trade name Successories, Inc. in its communications with stockholders and
the investment community and to discontinue its use of the name Celex Group,
Inc.
If the amendment is adopted, stockholders will not be required to exchange
outstanding stock certificates for new certificates.
APPROVAL BY STOCKHOLDERS
Approval of this proposal requires the affirmative vote of a majority of the
outstanding shares of Common Stock of the Company entitled to vote at the
Annual Meeting. If approved by the stockholders, the amendment to Article One
will become effective upon filing with the Secretary of the State of Illinois a
Certificate of Amendment to the Company's Articles of Incorporation, which
filing is expected to take place shortly after the Annual Meeting. However,
the Board of Directors will be authorized, without a further vote of the
stockholders, to abandon the name change and determine not to file the
Certificate of Amendment if the Board concludes that such action would be in
the best interest of the Company and its stockholders. If this proposal is not
approved by the stockholders, then the Certificate of Amendment will not be
filed.
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<PAGE> 22
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR THE
RATIFICATION AND APPROVAL OF THE AMENDMENT TO THE COMPANY'S ARTICLES OF
INCORPORATION TO CHANGE THE CORPORATE NAME.
ITEM 4
PROPOSED RATIFICATION OF INDEPENDENT PUBLIC ACCOUNTANTS
Upon the recommendation of its Audit Committee, the Board of Directors retained
Price Waterhouse LLP to examine the financial statements of the Company for the
fiscal year ended February 3, 1996 and appointed Price Waterhouse LLP as
independent accountants for the Company to audit its consolidated financial
statements for the fiscal year ending February 1, 1997 and to perform
audit-related services. The Board has directed that the appointment of Price
Waterhouse LLP be submitted to the shareholders for approval.
If the shareholders do not ratify the selection of Price Waterhouse LLP, the
Audit Committee and the Board of Directors will reconsider the appointment.
The Company has been advised by Price Waterhouse LLP that it expects to have a
representative present at the Annual Meeting and that such representative will
be available to respond to appropriate questions. Such representative will
also have the opportunity to make a statement if he or she desires to do so.
Proxies will be voted for or against approval of this proposed ratification in
accordance with the specifications marked thereon, and will be voted in favor
of approval if no specification is made. Approval requires the favorable vote
of the holders of a majority of the shares of Common Stock represented at the
Annual Meeting in person or by proxy, assuming that a quorum is present.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR THE APPROVAL
OF THE APPOINTMENT OF PRICE WATERHOUSE LLP AS INDEPENDENT ACCOUNTANTS.
OTHER MATTERS
SHAREHOLDER PROPOSALS
Shareholder proposals intended to be included in the Company's proxy statement
and form of proxy relating to, and to be presented at, the Annual Meeting of
Shareholders of the Company to be held in 1997 must be received by the Company
on or before February 3, 1997.
VOTING PROXIES
The enclosed proxy card confers authority to vote, in accordance with the
instructions contained in the proxy, with respect to the election of the
nominees for director specified in this Proxy Statement, the approval of the
amendments to the Company's Stock Option Plan, the proposal to amend the
Company's Articles of Incorporation and the ratification of Price Waterhouse
LLP as the Company's independent accountants. The proxy will be voted in
accordance with the
20
<PAGE> 23
choices indicated thereon. If no specifications are made, proxies will be voted
"FOR ALL NOMINEES" for director, "FOR" the approval of the amendments to the
Company's Stock Option Plan, "FOR" the proposal to amend the Company's Articles
of Incorporation to change the Company's name to Successories, Inc., and "FOR"
the ratification of Price Waterhouse LLP as independent accountants.
OTHER BUSINESS
The Board of Directors knows of no other business that will be presented at the
meeting. Should any other business come before the meeting, it is the
intention of the persons named in the enclosed proxy form to vote in accordance
with their best judgment.
By Order of the Board of Directors,
Timothy C. Dillon
Secretary
Lombard, Illinois
June ___, 1996
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<PAGE> 25
EXHIBIT A
CELEX GROUP INC.
STOCK OPTION PLAN
(AA AMENDED AND RESTATED SEPTEMBER 27, 1994
AND AS AMENDED OCTOBER 12, 1995
AND JULY 30, 1996)
The Company hereby establishes the Celex Group, Inc. Stock Option Plan
effective April 8, 1993, subject to the approval of the Plan by the holders of
a majority of the shares of the Stock present in person or by proxy and voting
at a duly called meeting of the shareholders of the Company within one year
after the Plan's adoption by the Board. Absent such approval, the Plan will
terminate retroactively, and all Options granted under the Plan will be null
and void.
ARTICLE I
PURPOSE
The primary purpose of the Plan is to provide a means by which non-employee
directors and key employees of the Company and its Subsidiaries can acquire and
maintain stock ownership, thereby strengthening their commitment to the success
of the Company and its Subsidiaries and their desire to remain employed by the
Company and its Subsidiaries. The Plan also is intended to attract, employ and
retain non-employee directors and key employees and to provide such non
employee directors and employees with additional incentive and reward
opportunities designed to encourage them to enhance the profitable growth of
the Company and its Subsidiaries.
ARTICLE II
DEFINITIONS
The following words and phrases, when used herein, unless their context clearly
indicates
otherwise, shall have the following respective meanings:
2.1 "Board" means the board of directors of the Company.
2.2 "Cause" means conviction of the Grantee of any felony or other crime
involving dishonesty, fraud or moral turpitude, or the Grantee's habitual
neglect of his duties.
2.3 "Change of Control" means the occurrence of one of the following: (i)
without prior approval of the Board, a single entity or group of affiliated
entities acquires more than 50% of the Company's outstanding Stock, (ii) the
Company is involved in a merger or a sale of all or substantially all of its
assets so that its shareholders before the merger or sale own less than 50% of
the voting power of the surviving or acquiring corporation, (iii) a liquidation
or dissolution of the Company occurs, or (iv) a change in the majority of
the Board of Directors occurs during
A-1
<PAGE> 26
any 24-month period without the approval of a majority of directors in
office at the beginning of such period.
2.4 "Committee" means the committee of the Board appointed pursuant to
Section 4.1.
2.5 "Company" means CELEX Group, Inc., an Illinois corporation.
2.6 "Disability" means a permanent and total disability within the meaning
of Section 22(e)(3) of the Internal Revenue Code.
2.7 "Disinterested Person" means a person who meets the definition of a
"disinterested person" pursuant to Rule 16b-3 of the SEC (or any successor rule
as in effect from time to time and "outside director" pursuant to Section
162(m) of the Internal Revenue Code and the Treasury Department regulations
issued thereunder.
2.8 "Effective Date" means April 8, 1993.
2.9 "Fair Market Value" of any share of Stock, as of any applicable date,
means the fair market value of a share of Stock on such date as determined in
good faith by the Committee.
2.10 "Grant Date" means the date of grant of an Option determined in
accordance with Section 6.1(a) or Section 6.4(a).
2.11 "Grantee" means an individual who has been granted an Option.
2.12 "Internal Revenue Code" means the Internal Revenue Code of 1986, as
amended, and any succeeding Internal Revenue Code, and references to sections
herein shall be deemed to include any such section as amended, modified or
renumbered.
2.13 "1934 Act" means the Securities Exchange Act of 1934, as amended, and
any succeeding Securities Exchange Act, and references to sections herein shall
be deemed to include any such section as amended, modified or renumbered.
2.14 "Option" means any incentive stock option or non-qualified stock
option granted under the Plan.
2.15 "Option Agreement" has the meaning specified in section 4.2(e).
2.16 "Option Price" means the per share purchase price of Stock subject to
an Option.
2.17 "Plan" remains the CELEX Group, Inc. Stock Option Plan as set forth
herein and as may from time to time be amended.
2.18 "SEC" means the Securities and Exchange Commission.
A-2
<PAGE> 27
2.19 "Section 16 Grantee" means a person subject to potential liability
under Section 16(b) of the 1934 Act with respect to transactions involving
equity securities of the Company.
2.20 "Stock" means the common stock of the Company, par value $0.01 per
share.
2.21 "Subsidiary" means a corporation as defined in Section 424(f) of the
Internal Revenue Code with the Company being treated as the employer
corporation for purposes of this definition.
2.22 "10% Owner" means a person who beneficially owns stock (including
stock treated as owned under Section 424(d) of the Internal Revenue Code)
possessing more than 10% of the total combined voting power of all classes of
stock of the Company.
2.23 "Termination of Employment" with respect to Grantees who are employees
of the Company or its Subsidiaries occurs the later of (a) the first day an
individual is no longer entitled to severance payments for any reason under the
Company's or any Subsidiary's personnel policies or (b) the day an individual
is first entitled to continuation coverage pursuant to the Consolidated Omnibus
Budget Reconciliation Act of 1985 ("COBRA"); notwithstanding the foregoing, for
an individual who is an employee of a Subsidiary, the individual shall be
deemed to have a Termination of Employment on the first day the Company no
longer owns voting securities possessing at least 50% of the aggregate voting
power of such Subsidiary's outstanding voting securities.
2.24 "Termination of Directorship" with respect to non-employee directors,
shall mean the first day on which a director is no longer acting as a director
of the Company or any Subsidiary.
ARTICLE III
SCOPE OF THE PLAN
An aggregate of 1,450,000 shares of Stock is hereby made available and is
reserved for delivery on account of the exercise of Options. Subject to the
foregoing limit, authorized and unissued shares may be used for or in
connection with Options. If and to the extent an option shall expire or
terminate for any reason without having been exercised in full, or shall be
forfeited, the shares of Stock associated with such Option shall become
available for other Options.
ARTICLE IV
ADMINISTRATION
4.1 Administrative Committee. As to employee participants, the Plan shall
be administered by a committee of the Board, which shall consist of two or more
directors of the Company, (1) who are not employees of the Company or any of
its Subsidiaries, and (2) who are Disinterested Persons. Members of the
Committee shall continue to serve until otherwise directed by the Board.
Membership on the Committee shall be subject to such limitations as the Board
deems appropriate to permit transactions in Stock pursuant to the Plan to be
exempt from liability under
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Section 16(b) of the 1934 Act and to comply at all times with Section 162(m) of
the Internal Revenue Code and the Treasury Department regulations issued
thereunder. The Board shall administer the nondiscretionary Options as granted
to the non-employee directors pursuant to Section 6.4 solely in accordance with
the provisions thereunder.
4.2 Authority of the Committee. The Committee shall have full and final
authority, in its discretion, but subject to the express provisions of the
Plan, as follows:
(a) to grant Options,
(b) to determine (1) when Options may be granted and (2) whether or not
specific Options will be incentive stock options or non-qualified stock
options,
(c) to administer and interpret the Plan, to make recommendations to the
Board; and to take all such steps and make all determinations in
connection with the Plan and Options granted thereunder as it may deem
necessary or advisable for the administration of the Plan,
(d) to prescribe, amend, and rescind rules relating to the Plan,
(e) to determine, subject to the terms of the Plan, the terms and
provisions of the written agreements by which all Options shall be
granted ("Option Agreements") and, except as provided in Section 8.9,
with the consent of the Grantee, to modify or amend any such Option
Agreement, or to waive any restrictions or conditions applicable to any
Option Agreement or the exercise thereof, at any time,
(f) to make such adjustments or modifications to Options to Grantees
working outside the United States as are necessary and advisable to
fulfill the purposes of the Plan,
(g) to contest on behalf of the Company or any Grantee, at the expense of
the Company, any ruling or decision on any matter relating to the Plan or
any Option, and
(h) to impose such additional conditions, restrictions, and limitations
upon the grant, exercise or retention of Options as the Committee may,
before or concurrently with the grant thereof, deem appropriate.
The determination of the Committee on all matters relating to the Plan or any
Option or Option Agreement shall be conclusive and final. No member of the
Committee shall be liable for any action or determination made in good faith
with respect to the Plan or any Option.
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ARTICLE V
ELIGIBILITY
Options may be granted to any employee of the Company or any of its
Subsidiaries pursuant to Section 6.1 and shall be granted to non-employee
directors of the Company pursuant to Section 6.4. In selecting the employees
to whom Options may be granted, in determining the number of shares of Stock
subject to each Option granted to any employee, and in determining the other
terms and conditions applicable to each Option granted to any employee, the
Committee shall take into consideration such factors as it deems relevant in
promoting the purposes of the Plan.
ARTICLE VI
GRANT OF OPTIONS
6.1 General Conditions.
(a) The Grant Date of an Option shall be the date on which the Committee
grants the Option which shall be the date signified in the Grantee's
Option Agreement or such later date as specified. in advance by the
Committee.
(b) The term of each Option shall be a period of not more than 10 years
from the Grant Date, and shall be subject to earlier termination as
herein provided.
(c) A Grantee may, if otherwise eligible, be granted additional Options.
(d) Notwithstanding any provision to the contrary contained herein, the
number of shares covered by Options granted hereunder to any one participant in
any fiscal year shall not exceed 80,000 shares.
6.2 Option Price. No later than the Grant Date of any Option, the
Committee shall determine the Option Price of such Option. The Option Price of
an Option (subject to Section 6.3 with respect to incentive stock options)
shall not be less than 50% of the Fair Market Value of the Stock on the Grant
Date.
6.3 Grant of Incentive Stock Options. At the time of the grant of any
Option to an employee of the Company or its Subsidiaries, the Committee may
designate that such Option shall be made subject to additional restrictions to
permit it to qualify as an incentive stock option under the requirements of
Section 422 of the Internal Revenue Code. Any option designated as an
incentive stock option:
(a) shall have an Option Price of (1) not less that 100% of the Fair Market
Value of the Stock on the Grant Date or (2) in the case of a 10% Owner,
not less than 110% of the Fair Market Value of the Stock on the Grant
Date;
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(b) shall be for a period of not more than 10 years (5 years, in the case
of a 10% Owner) from the Grant Date, and shall be subject to earlier
termination as provided herein or in the applicable Option Agreement;
(c) shall not have an aggregate Fair Market Value (determined for each
incentive stock option at its Grant Date) of Stock with respect to which
incentive stock options are exercisable for the first time by such
Grantee during any calendar year (under the Plan and any other employee
stock option plan of the Grantee's employer or any parent or subsidiary
thereof ("Other Plans")), determined in accordance with the provisions of
Section 422 of the Internal Revenue Code, which exceeds $100,000 (the
"$100,000 Limit");
(d) shall, if the aggregate Fair Market Value of Stock (determined on the
Grant Date) with respect to all incentive stock options previously
granted under the Plan and any Other Plans ("Prior Grants") and any
incentive stock options under such grant (the "Current Grant") which are
exercisable for the first time during any calendar year would exceed the
$100,000 Limit, be exercisable as follows:
(1) the portion of the Current Grant exercisable for the first
time by the Grantee during any calendar year which would, when
added to any portions of any Prior Grants, be exercisable for the
first time by the Grantee during such calendar year with respect to
stock which would have an aggregate Fair Market Value (determined
as of the respective Grant Date for such incentive stock options)
in excess of the $100,000 Limit shall, notwithstanding the terms of
the Current Grant, be exercisable for the first time by the Grantee
in the first subsequent calendar year or years in which it could be
exercisable for the first time by the Grantee when added to all
Prior Grants without exceeding the $100,000 Limit; and
(2) if, viewed as of the date of the Current Grant, any portion
of a Current Grant could not be exercised under the provisions of
the immediately preceding provision during any calendar year
commencing with the calendar year in which it is first exercisable
through and including the last calendar year in which it may by its
terms be exercised, such portion of the Current Grant shall not be
an incentive stock option, but shall be exercisable as a separate
non-qualified stock option at such date or dates as are provided
in the Current Grant;
(e) shall be granted within 10 years from the earlier of the date the Plan
is adopted or the date the Plan is approved by the shareholders of the
Company; and
(f) shall require the Grantee to notify the Committee of any disposition of
any Stock issued pursuant to the exercise of the incentive stock option
under the circumstances described in Section 421 (b) of the Internal
Revenue Code (relating to certain disqualifying dispositions), within 10
days of such disposition.
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Notwithstanding the foregoing and Section 4.2(e), the Committee may, without
the consent of the Grantee, at any time before the exercise of an Option
(whether or not an incentive stock option), take any action necessary to
prevent such Option from being treated as an incentive stock option.
6.4 Grant of Nondiscretionary Options. Nondiscretionary Options shall be
granted to each non-employee director of the Company solely on the following
terms and conditions:
(a) Each person who is serving as a non-employee director of the Company on
December 14, 1994 shall automatically be granted an option to purchase
five thousand (5,000) shares of Common Stock (the "nondiscretionary
Option"). In addition, each non-employee director first elected or
appointed after December 14, 1994 shall automatically be granted an
option to purchase five thousand (5,000) shares of Stock on the day such
person is first elected or appointed a non-employee director. Each
nondiscretionary Option granted pursuant to the provisions of this
Section 6.4(a) shall be exercisable in cumulative annual increments of
fifty percent (50%) commencing on the first anniversary of the Grant Date
of such Option;
(b) Subject to the approval of the shareholders of the Company of the
provisions of this Section 6.4(b) at the 1996 Annual Meeting of
Shareholders, on each date of the Annual Meeting of Shareholders of the
Company, commencing with the 1996 Annual Meeting of Shareholders, each
non-employee director of the Company whose term of office will continue
after such Annual Meeting of Shareholders shall automatically be granted
an option to purchase four thousand (4000) shares of Common Stock as of
such date. The non-discretionary option granted pursuant to this Section
6.4(b) shall be exercisable in full on the Grant Date of such Option;
(c) The exercise price of the nondiscretionary Options granted pursuant to
this Section 6.4 shall be one hundred percent (100%) of the last bid
price of the Stock as of the Grant Date (or if no bid price was reported
as of the Grant Date, as of the first business day preceding the Grant
Date on which a bid price was reported);
(d) (i) If the Grantee has a Termination of Directorship for Cause, any
unexercised Option shall terminate upon the Grantee's Termination of
Directorship;
(ii) If the Grantee has a Termination of Directorship for any reason
other than cause, then any unexercised Option may be exercised
to the extent set forth below, but in no event beyond the original
term of the Option:
(A) If the Grantee's Termination of Directorship is
caused by the death of the Grantee, then any unexercised
Option may be exercised, in whole or in part, at any time
within one year after the Grantee's death by the Grantee's
personal representative or by the person to whom the Option
is transferred by will or the applicable laws of descent and
distribution;
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(B) If the Grantee's Termination of Directorship is
on account of the Disability of the Grantee, then any
unexercised Option may be exercised, in whole or in part, at
any time within one year after the date of such Termination
of Directorship; provided that, if the Grantee dies after
such Termination of Directorship and before the end of such
one-year period, such Option may be exercised by the deceased
Grantee's personal representative or by the person to whom
the Option is transferred by will or the applicable laws of
descent and distribution within one year after the Grantee's
Termination of Directorship, or, if later, within 180 days
after the Grantee's death; and
(C) If the Grantee's Termination of Directorship is
for any reason other than Cause, Death or Disability, then
any unexercised Option, to the extent exercisable at the date
of such Termination of Directorship may be exercised, in
whole or in part, at any time within three months after such
Termination of Directorship; provided that, if the Grantee
dies after such Termination of Directorship and before the
end of such three-month period, such Option may be exercised
by the deceased Grantee's personal representative or by the
person to whom the Option is transferred by will or the
applicable laws of descent and distribution within one year
after the Grantee's Termination of Directorship to the extent
exercisable at the date of such Termination of Directorship;
(e) The nondiscretionary Options granted pursuant to this Section 6.4 shall
expire ten (10) years from the Grant Date, subject to the terms and
conditions of the Plan; and
(f) The provisions of this Section 6.4 shall not be amended more than once
every six months, other than to comport with changes in the Internal
Revenue Code, the Employee Retirement Income Security Act, or the rules
thereunder.
6.5 Grantee's Agreement to Serve. Each Grantee who is an employee of the
Company or any Subsidiary and is granted an Option shall, by executing such
Grantee's Option Agreement, agree that such Grantee will remain in the employ
of the Company or any of its Subsidiaries for at least one year after the Grant
Date. Each Grantee who is a non-employee director shall, by executing such
Grantee's Option Agreement, agree that such Grantee will not resign as a
director of the Company or any of its Subsidiaries for at least one year after
the Grant Date. No obligation of the Company or any of its Subsidiaries as to
the length of any Grantee's employment or association with the Company or any
of its Subsidiaries shall be implied by the terms of the Plan, any Grant of an
Option, or any Option Agreement. The Company and its Subsidiaries reserve the
same rights to terminate employment or association of any Grantee as existed
before the Effective Date.
6.6 Non-transferability. Each Option granted hereunder shall by its terms
not be assignable or transferable other than by will or the laws of descent and
distribution and may be exercised, during the Grantee's lifetime, only by the
Grantee.
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ARTICLE VII
EXERCISE OF OPTIONS
7.1 Exercise of Options. Subject to Sections 4.2(f), 7.4, and 7.5 and such
terms and conditions as the Committee may impose, each Option shall be
exercisable in cumulative annual increments of twenty percent (20%) commencing
on the first anniversary of the Grant Date of such Option; provided, however,
that with respect to any Section 16 Grantee, no shares issued upon exercise of
any Option granted pursuant to the Plan may be sold prior to six months from
the Grant Date of such Option. Each Option shall be exercised by delivery to
the Company of written notice of intent to purchase a specific number of shares
of Stock subject to the Option. The Option Price of any shares of Stock shall
be paid in full at the time of the exercise.
7.2 Payment of Option Price. A Grantee may, at his election, pay the
Option Price payable upon the exercise of an Option in (a) cash, (b) Stock
valued at its Fair Market Value on the business day next preceding the date of
exercise, or (c) any combination of both (including Stock received by the
Grantee upon the exercise of one or more Options).
7.3 Share Withholding.
(a) Mandatory Tax Withholding.
(1) Whenever under the Plan, shares of Stock are to be
delivered upon exercise of an Option, the Company shall be entitled
to require as a condition of delivery (i) that the Grantee remit an
amount sufficient to satisfy all federal, state, and local
withholding tax requirements related thereto, if any, (ii) the
withholding of such sums from compensation otherwise due to the
Grantee or from any shares of Stock due to the Grantee under the
Plan, or (iii) any combination of the foregoing; or
(2) If any disqualifying disposition described in Section
6.3(f) is made with respect to shares of Stock acquired under an
incentive stock option granted pursuant to the Plan, then the
person making such disqualifying disposition shall remit to the
Company an amount sufficient to satisfy all federal, state, and
local withholding taxes thereby incurred;
provided that, in lieu of or in addition to the foregoing, the Company shall
have the right to withhold such sums from compensation otherwise due to the
Grantee or from any shares of Stock due to the Grantee under the Plan.
(b) Elective Share Withholding.
(1) Subject to Section 7.3(b)(2), a Grantee may elect the
withholding ("Share Withholding") by the Company of a portion of
the shares of Stock otherwise deliverable to such Grantee upon the
exercise of an Option ("Taxable Event") having a Fair Market Value
equal to:
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(i) the Option Price or a portion thereof;
(ii) the minimum amount necessary to
satisfy required federal, state, or local withholding
tax liability attributable to the Taxable Event (in
1993, the minimum amount required by federal tax
withholding rules is 20% of the Grantee's taxable
income); or
(iii) with the Committee's prior approval,
a greater amount, not to exceed the estimated total
amount of such Grantee's tax liability with respect to
the Taxable Event.
(2) Each Share Withholding election by a Grantee shall be subject to
the following restrictions:
(i) any Grantee's election shall be
subject to the Committee's right to revoke such election
of Share Withholding by such Grantee at any time before
the Grantee's election if the Committee has reserved the
right to do so in the Option Agreement;
(ii) if the Grantee elects Share
Withholding to satisfy federal, state, or local
withholding tax liability attributable to the Taxable
Event, and the shares withheld are insufficient to
satisfy said tax liability, the Company may withhold
income from other sources due from the Company to the
Grantee in an amount sufficient to satisfy said tax
obligation;
(iii) if the Grantee is a Section 16
Grantee, such Grantee's election shall be subject to the
disapproval of the Committee at any time, whether or not
the Committee has reserved the right to do so;
(iv) the Grantee's election must be made
before the date (the "Tax Date") on which the amount of
tax to be withheld is determined;
(v) the Grantee's election shall be
irrevocable;
(vi) a Section 16 Grantee may not elect
Share Withholding within six months after the grant of
the related Option (except if the Grantee dies or incurs
a Disability before the end of the six-month period);
(vii) a Section 16 Grantee must elect
Share Withholding either six months before the Tax Date
or during the ten business day period beginning on the
third business day after the release of the Company's
quarterly or annual summary statement of sales and
earnings; and
(viii) if the shares withheld have not been held by the
Grantee for at least the greater of:
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(A) two years from the date the Option(s) underlying the
shares was or were granted, or
(B) one year after the transfer of the
share(s) to the Grantee, the use of the shares will
constitute a disqualifying disposition, and the
Option(s) underlying the shares will no longer satisfy
all of the requirements under Section 422 of the
Internal Revenue Code to permit it to qualify as an
incentive stock option.
(c) The share withholding provisions of the Plan shall be inapplicable to
the nondiscretionary Options granted to non-employee directors of the
Company pursuant to Section 6.4.
7.4 Effects of a Change of Control.
(a) Notwithstanding any other provisions of the Plan, after a Change of
Control, all Options granted under the Plan shall immediately be fully
exercisable for a period of six months following said Change of Control,
after which time no further Options may be exercised under the Plan.
(b) After a Change of Control, Section 6.5 shall not be construed to
prevent the exercise of a Grantee's Option whether or not such Grantee
remains employed for one year after the applicable Grant Date.
7.5 Termination of Employment.
(a) Termination for Cause. If the Grantee has a Termination of Employment
for Cause, any unexercised Option shall terminate upon the Grantee's
Termination of Employment.
(b) Termination other than for Cause. If the Grantee has a Termination of
Employment for any reason other than cause, then any unexercised Option
may be exercised to the extent set forth below, but in no event beyond
the original term of the Option:
(1) Death. If the Grantee's Termination of Employment is
caused by the death of the Grantee, then any unexercised Option may
be exercised, in whole or in part, at any time within one year
after the Grantee's death by the Grantee's personal representative
or by the person to whom the Option is transferred by will or the
applicable laws of descent and distribution;
(2) Disability. If the Grantee's Termination of Employment is
on account of the Disability of the Grantee, then any unexercised
Option to the extent exercisable at the date of such Termination of
Employment (or to such extent as determined by the Committee), may
be exercised, in whole or in part, at any time within one year
after the date of such Termination of Employment; provided that, H
the Grantee dies after such Termination of Employment and before
the end of
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such one-year period, such Option may be exercised by
the deceased Grantee's personal representative or by the person to
whom the Option is transferred by will or the applicable laws of
descent and distribution within one year after the Grantee's
Termination of Employment, or, if later, within 180 days after the
Grantee's death; and
(3) Other. If the Grantee's Termination of Employment is for
any reason other than Cause, Death or Disability, then any
unexercised Option, to the extent exercisable at the date of such
Termination of Employment (or to such extent as determined by the
Committee), may be exercised, in whole or in part, at any time
within three months (or such other period not to exceed one year as
determined by the Committee after such Termination of Employment;
provided that, if the Grantee dies after such Termination of
Employment and before the end of such three-month period (or such
other period, if any, determined by the Committee), such Option may
be exercised by the deceased Grantee's personal representative or by
the person to whom the Option is transferred by will or the
applicable laws of descent and distribution within one year after
the Grantee's Termination of Employment to the extent exercisable at
the date of such Termination of Employment (or to such extent as
determined by the Committee).
notwithstanding subparagraphs (1) through (3) of this subparagraph (b), the
Committee may, in its sole discretion, establish different terms and conditions
pertaining to the effect of Termination of Employment to the extent permitted
by applicable state and federal law.
ARTICLE VIII
MISCELLANEOUS
8.1 Substituted Options. If the Committee cancels any Option (granted
under this Plan, or any Plan of any entity acquired by the Company or any of
its Subsidiaries), and a new Option is substituted therefor, then the Committee
may, in its discretion, determine the terms and conditions of such new Option
and may, in its discretion, provide that the grant date of the cancelled option
shall be the date used to determine the earliest date or dates for exercising
the new substituted Option under Section 7.1 hereof so that the Grantee may
exercise the substituted Option at the same time as if the Grantee had held the
substituted Option since the grant date of the cancelled option; however, in
the case of an incentive stock option, the Grant Date as of which the Option
Price will be calculated shall be the date on which the new substituted Option
is issued; provided that no Option shall be cancelled without the consent of
the Grantee if the terms and conditions of the new Option to be substituted are
not at least as favorable as the terms and conditions of the option to be
cancelled.
8.2 Securities Law Matters.
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(a) If the Committee deems it necessary to comply with the Securities Act
of 1933, the Committee may require a written investment intent
representation by the Grantee and may require that a restrictive legend
be affixed to certificates for shares of Stock.
(b) If based upon the opinion of counsel for the Company, the Committee
determines that the exercise or nonforfeitability of, or delivery of
benefits pursuant to, any Option would violate any applicable provision
of (1) federal or state securities law or (2) the listing requirements of
any securities exchange on which are listed any of the Company's equity
securities, then the Committee may postpone any such exercise,
nonforfeitability or delivery, as the case may be, but the Company
shall use its best efforts to cause such exercise,
nonforfeitability or delivery to comply with all such provisions at the
earliest practicable date. The Committee's authority under this Section
8.2(b) shall expire on the date of any Change of Control.
8.3 Funding. Benefits payable under the Plan to any person shall be paid
directly by the Company. The Company shall not be required to fund, or
otherwise segregate assets to be used for, benefits under the Plan.
8.4 No Employment Rights. Neither the establishment of the Plan nor the
granting of any Option shall be construed to (a) give any Grantee the right to
remain employed by the Company or any of its Subsidiaries or remain a director
of the Company or any of its Subsidiaries or give any Grantee any benefits not
specifically provided by the Plan or (b) in any manner modify the right of the
Company or any of its Subsidiaries to modify, amend, or terminate any of its
employee benefit plans.
8.5 Rights as a Shareholder. A Grantee shall not, by reason of any Option
have any right as a shareholder of the Company with respect to the shares of
Stock which may be deliverable upon exercise of such Option until such shares
have been delivered to him.
8.6 Nature of Payments. Any and all grants or deliveries of shares of
Stock hereunder shall constitute special incentive payments to the Grantee and
shall not be taken into account in computing the amount of salary or
compensation of the Grantee for the purposes of determining any pension,
retirement, death or other benefits under (a) any pension, retirement,
profit-sharing, bonus, life insurance or other employee benefit plan of the
Company or any of its Subsidiaries or (b) any agreement between the Company or
any Subsidiary, on the one hand, and the Grantee, on the other hand, except as
such plan or agreement shall otherwise expressly provide.
8.7 Non-Uniform Determinations. The Committee's determinations under the
Plan need not be uniform and may be made by the Committee selectively among
employees who receive, or are eligible to receive, Options (whether or not such
persons are similarly situated). Without limiting the generality of the
foregoing, with respect to employee participants, the Committee shall be
entitled, among other things, to make non-uniform and selective determinations
and to enter into nonuniform and selective Option Agreements as to (a) the
identity of the Grantees, (b) the terms and provisions of Options, and (c) the
treatment, under Section 7.5, of
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Terminations of Employment. Notwithstanding the foregoing, the Committee's
interpretation of Plan provisions shall be uniform to similarly situated
Grantees.
8.8 Adjustments.
(a) The Committee or the Board, as the case may be, shall make equitable
adjustment of:
(1) the aggregate numbers of shares of Stock available under
Article III,
(2) the number of shares of Stock covered by an Option, and
(3) the Option Price of any Option, to reflect a stock
dividend, stock split, reverse stock split, share combination,
recapitalization, merger, consolidation, asset spin-off,
reorganization, rights offering, liquidation, or similar event, of
or by the Company (including any transaction in which shares of
Stock are changed into or exchanged for a different number or kind
of shares of stock or other securities of the Company or another
Corporation);
(b) if there is a change in corporate structure or Stock of the Company,
the Board may make any adjustments necessary to prevent accretion, or to
protect against dilution, in the number and kind of shares of Stock
authorized by the Plan, and with respect to outstanding Options, in the
number and kind of shares of Stock covered thereby and in the applicable
Option Price.
8.9 Amendment of the Plan. The Board may from time to time in its
discretion amend or modify the Plan without the approval of the shareholders of
the Company, except as such shareholder approval may be required (a) to permit
transactions in Stock pursuant to the Plan to be exempt from liability under
Section 16(b) of the 1934 Act or to comply with any applicable law, rule or
regulation or (b) under the listing requirements of any securities exchange on
which are listed any of the Company's equity securities. No change will be
permitted to an Option previously granted which will impair the rights of a
Grantee without the Grantee's consent. The Board cannot, without shareholder
approval, change the aggregate number of shares of Stock which may be sold
pursuant to Options granted or change the class of employees eligible to
participate in the Plan or adopt any amendment affecting the Option Price at
which Options may be granted under the Plan.
8.10 Termination of the Plan. The Plan shall terminate on the tenth (10th)
anniversary of the Effective Date or at such earlier time as the Board may
determine. Any termination, whether in whole or in part, shall not affect any
Option or Option Agreement then outstanding under the Plan.
8.11 No Illegal Transaction. The Plan and all Options granted pursuant to
it are subject to all laws and regulations of any governmental authority which
may be applicable thereto; and notwithstanding any provision of the Plan or any
Option, Grantees shall not be entitled to exercise Options or receive the
benefits thereof and the Company shall not be obligated to deliver any Stock
or pay any benefits to a Grantee if such exercise, delivery, receipt or payment
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of benefits would constitute a violation by the Grantee or the Company of any
provision of any such law or regulation.
8.12 Severability. If all or any part of the Plan is declared by any court
or governmental authority to be unlawful or invalid, such unlawfulness or
invalidity shall not serve to invalidate any portion of the Plan not declared
to be unlawful or invalid. Any Section or part of a Section so declared to be
unlawful or invalid shall, if possible, be construed in a manner which will
give effect to the terms of such Section or part of a Section to the fullest
extent possible while remaining lawful and valid.
8.13 Headings. The headings of Articles and Sections are included solely
for convenience of reference, and if there is any conflict between such
headings and the text of this Plan, the text shall control.
8.14 Number and Gender. When appropriate the singular as used in this Plan
shall include the plural and vice versa, and the masculine shall include the
feminine.
8.15 Controlling Law. The law of the State of Illinois, except its law
with respect to choice of law, shall be controlling in all matters relating to
the Plan.
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EXHIBIT B
PROPOSED ARTICLE ONE
OF THE ARTICLES OF INCORPORATION
A new Article One to the Articles of Incorporation would be added to read as
follows:
ARTICLE ONE
The name of the corporation is: SUCCESSORIES, INC.
<PAGE> 41
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE> 42
PROXY CELEX GROUP, INC.
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JULY 30, 1996
The undersigned shareholder of Celex Group, Inc. does hereby
acknowledge receipt of Notice of said Annual Meeting and accompanying Proxy
Statement and constitutes and appoints Arnold M. Anderson, James M. Beltrame
and Timothy C. Dillon, or any of them, with full power of substitution, to vote
all shares of stock of Celex Group, Inc. which the undersigned is entitled to
vote, as fully as the undersigned could do if personally present, at the Annual
Meeting of Shareholders of said Corporation to be held on Tuesday, July 30,
1996 at 10:00 A.M., Central Daylight Savings Time, and at any adjournments
thereof, at Drake OakBrook Hotel, 2301 York Road, Oak Brook, Illinois 60521.
(1) The election of Seamas T. Coyle, [ ] WITHHOLD AUTHORITY
Timothy C. Dillon, Steven B. Larrick, TO VOTE FOR ALL NOMINEES
and Guy E. Snyder as Directors:
FOR ALL NOMINEES EXCEPT NOMINEE(S) WRITTEN IN SPACE BELOW:
- --------------------------------------------------------------------------------
(2) The amendments to the Company's Stock Option Plan:
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(3) The amendment of the Company's Articles of Incorporation to change the
corporate name to Successories, Inc.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(4) The proposal to ratify the appointment of Price Waterhouse LLP as
independent accountants for the fiscal year ending February 1, 1997:
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(5) As such proxies may in their discretion determine upon such other
matters as may properly come before the meeting.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
I plan to attend the meeting.[ ]
(Continued on reverse side)
<PAGE> 43
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THIS PROXY SHALL BE VOTED IN ACCORDANCE WITH THE INSTRUCTIONS GIVEN
AND IN THE ABSENCE OF SUCH INSTRUCTIONS SHALL BE VOTED FOR ALL OF THE DIRECTOR
NOMINEES DESCRIBED IN ITEM (1) AND FOR ITEMS (2), (3) AND (4). IF OTHER
BUSINESS INS PRESENTED AT SAID MEETING, THIS PROXY SHALL BE VOTED IN ACCORDANCE
WITH THE BEST JUDGMENT OF THE PROXIES ON THOSE MATTERS.
This Proxy is Solicited on Behalf of the Board of Directors
Dated ____________________________, 1996
_______________________________________
_______________________________________
When signing the proxy, please date it
and take care to have the signature
conform to the shareholder's name as it
appears on this side of the proxy. If
shares are registered in the names of
two or more persons, each person should
sign. Executors, administrators,
trustees and guardians should so
indicate when signing.
You are urged to mark, sign and return your proxy without delay in the return
envelope provided for that purpose, which requires no postage if mailed in the
United States.
